"It's still under consideration ... Not sure when, but it's pending," the source said.
If Unipec decides to import, the likely grade will be 0.2% sulfur gasoil, which might be supplied from either Taiwan or Singapore, the source added.
Chinese oil companies might start to cut diesel exports soon due to an increase in domestic demand, a Singapore-based trader said. The country's exports, mainly 350 ppm and 0.2% sulfur gasoil, usually end up in the Southeast Asian region including Hong Kong, Indonesia, Vietnam and the Philippines. The lack of exports from China was likely to tighten high sulfur gasoil supply in the region, which has been languishing amid thin demand.
The 0.2% sulfur gasoil is mainly used in rural and industrial areas in China, while 350 ppm sulfur gasoil is used in South China and 50 ppm sulfur diesel in main cities Beijing and Shanghai. According to the source familiar with the matter, the main grade affected is the 0.2% sulfur gasoil.
Chinese cities are suffering an unprecedented shortage of diesel as some local enterprises turn to the fuel to generate electricity in order to keep operating during periods of power rationing, local media reported earlier.
Some local governments in China are switching off electricity supplies as part of commitments to Beijing on energy conservation and emissions reductions.
The diesel shortage that hit China's eastern Jiangxi province is likely to last until the second half of this month, the official Xinhua news agency reported Tuesday. Cities like eastern Jiangsu and Fujian provinces, southern Hunan Province and western Shangxi province are also facing diesel shortages,
Xinhua reported.
In industrial regions such as the Pearl River and Yangtze River deltas, hundreds of gas stations are awaiting diesel deliveries, according to Xinhua.
China's major refiners have responded to the diesel shortage by lifting crude runs in November, Platts reported earlier. Sinopec, the nation's largest refiner, plans to process a record 583,000 mt/day (4.26 million b/d) of crude this month, its state-owned parent China Petrochemical Corporation Group said Friday.
Sinopec is also avoiding maintenance shutdowns at its refineries and plans to import 200,000 mt of diesel shortly to meet demand for the fuel in parts of China where there are shortages. It addition Sinopec plans to import 130,000 mt of feedstock for its ethylene crackers in the fourth quarter of
this year so its refineries can focus on distillate production.
PetroChina's refineries are also expected to maintain record crude runs for the remainder of this month, after the company's processing rate topped 400,000 mt/day (2.92 million b/d) for the first time on November 3. The company plans to raise output of diesel at its refineries to 168,000 mt/day in
November, up 10,000 mt/day or 6.3% from the level in October.
In its 11th Five-Year Plan, which runs from 2006 to 2010, China sought to cut energy consumption per unit of GDP by 20% compared with 2005, and in the first four years of the plan a 15.6% reduction was achieved. But energy consumption increased 0.09% year on year in the first half of 2010, Xinhua
reported.
